Chevron on Friday said it will put its shale-gas business in Canada’s Duvernay Shale for sale as it continues to streamline global operations following several big acquisitions.
The assets, which produce about 40,000 barrels of oil and gas a day from about 235,000 acres in the Duvernay field in central Alberta, could fetch up to US$900 million.
Chevron has said it plans to offer between $10 billion and $15 billion in assets following deals with Hess Corp, PDC Energy and Noble Energy that will significantly expand its oil and gas output.
“We have a strong position and are proud of our performance in the Duvernay,” a spokesperson told Reuters. “The business holds significant value in both its current production as well as potential growth opportunities, which we expect to be attractive to other companies with complementary portfolios.”
The company’s other Canadian operations are unaffected, the spokesperson said.
Brian Lidsky, director of Houston-based advisory firm Energy Advisors Group, estimated the properties could be worth $900 million based on recent acquisitions of Duvernay properties by Crescent Point and others.
Chevron first announced plans to develop the East Kaybob region of the Duvernay play in Alberta in 2017 after three years appraising the area. At the end of 2022, 243 wells in the field had been tied into production facilities.
In 2021, Chevron shelved plans to build a major liquefied natural gas project exporting up to 10 million tonnes per year from Kitimat on Canada’s west coast.
The Duvernay is one of Canada’s top shale plays. Other companies with significant positions in the region include Crescent Point and PetroChina’s Canadian unit. Last month, Athabasca Oil and Cenovus Energy formed a joint venture to accelerate their activity in the play.
The field has seen a surge in licensing activity and productivity improvements, with costs coming down from as high as C$20 million ($14.85 million) per well a decade ago to C$10 million-C$15 million today, analysts at brokerage Eight Capital said.
“The Duvernay is starting to become a key focus for the industry, and is thus likely to get investors’ attention in 2024,” its analysts wrote in a research note this month.
“Operators have done enough drilling to understand how to optimize the technology.”
(Reporting by Nia Williams in British Columbia and Sabrina Valle in Houston; editing by Gary McWilliams and David Gregorio)